Health Insurance Rates Show Geographic Disparities

Data continues to show that where a person lives in Colorado plays a big role in dictating how much they pay for health insurance. And in some regions it’s unusually high. State lawmakers are aware of the problem – but are not sure what the solution is. As Bente Birkeland reports – they are hoping a new study will provide some answers.

Where you live is one of the key factors in determining how much you pay for your healthcare. That’s because health insurance companies use it to calculate premiums…

Jaime Brede of Breckenridge has a bare bones healthcare policy and finds it overly expensive compared to the benefits she receives.

“I was seeing upwards of 500 dollars a month,” said Sam Higby who works at an outdoor gear shop in Breckenridge. He’s 35 and healthy – but said on his salary he simply can’t afford healthcare.

“It does weigh on me as an active person, being concerned about what might happen out there.”

It turns out that communities along the I-70 mountain corridor actually have some of the highest monthly premiums in the nation. Within Colorado, it’s as much as 23 percent higher compared to metro areas, according to data compiled by Rocky Mountain PBS news. Higby’s co-worker Jaime Brede buys health insurance on the individual market with her husband.

“He and I are both very active healthy people. We don’t get sick, we get hurt. We carry a pretty bare bones policy, but even within those realms of the bare bones policy, I was appalled at how expensive it is and how little coverage you get for how much you pay.”

Brede expected the rates to be higher compared to someone living in Denver, but not astronomically so.

“We have some of the healthiest populations, but unfortunately we’re not seeing our health insurance be reflective of that,” said Democratic Summit County Commissioner Dan Gibbs. He is one of the people working on the problem. “About 11.7 percent of our population do not have health insurance, where the state average is about 6.5 percent.”

Gibbs lobbied for and got legislation passed last session to study the possibility of classifying the entire state as one geographic region for calculating health insurance rates.

“Two years ago we did combine four of the geographic areas,” said Colorado’s Insurance Commissioner Marguerite Salazar. Her office approves the rates and makes sure they’re not excessive or discriminatory.

“The first year we did see some decrease in the premiums for the higher the more expensive areas. But after that, the rates didn’t continue to drop so it wasn’t the panacea. It wasn’t the answer that we were hoping for.”

“People keep telling me there has to be an answer out there, and I agree there has to be an answer, but it’s not a real simple answer because insurance is so complex and you take all these different factors into account.”

Part of it is what hospitals and physicians charge.

Sam Higby of Breckenridge cannot afford the $500 each month to buy health insurance, so he is uninsured. He said he worries about what would happen if he gets injured, as he lives a very active lifestyle

“Not all services can be provided in those local communities and there’s a portion of those services that need to come to Denver so there’s ambulance costs associated with that, and higher costs associated with transportation,” said Chris Tholen, the Vice President of Financial Policy for the Colorado Hospital Association. “I think there’s probably further analysis that needs to be done to fully identify the reasons for the higher costs.”

And just how high are those costs? Rocky Mountain PBS data shows that health insurance premiums statewide have increased by 11 to 30 percent just in the last four years. Marguerite Salazar said it seems odd given that more people now have health coverage under Obamacare.

“I keep waiting for the prices to balance out or go down because the hospitals aren’t having to cost shift so much. Why aren’t we seeing the rates for healthcare go down?” said Salazar.

State lawmakers understand the urgency of the issue, and a coalition from both parties backed the bill to examine the idea of one geographic area.

“I’m critical and cynical, they should have already done this,” said Republican Representative Bob Rankin of Carbondale. He said he hopes the discussion will spur the state to take a closer look at the underlying problem of geographic disparity.

“We have to move ahead as aggressively as we can. It’s a crisis, we’ve got folks without insurance, we’ve got folks asking us what they should do and we don’t know what to tell them.”

The study will be finished later this summer. Meanwhile, the Colorado Commission on Affordable Healthcare is studying how to lower overall healthcare costs and looking at cost drivers such as pharmaceuticals and hospitals, along with pricing transparency and competition. That group will give recommendations to the legislature in late 2017.